Understand its unique cash flow streams and portfolio integration, and assess if this hypergrowth strategy aligns LPs and GPs or introduces new complexities.
Permanent capital or GP Stakes structures aim to take further advantage of long-dated patient capital in private markets. Furthermore, they allow the LP to participate in additional cash flow streams with the GP that are elusive in a traditional fund structure.
In other words, they allow LPs to get exposure to a variety of alternative asset managers as minority owners in the GPs themselves. But does this provide a purer incentive alignment of investors and GPs or simply split allegiance and attention between multiple masters?
In this episode, with the help of the largest GP Stakes participant, Blue Owl, and a large LP in their fund, USAA, we examine the evolution of the approach, its idiosyncratic and multi-faceted return stream, and try to honestly assess some of the myths that haunt the space.
Chartered Alternative Investment Analyst Association
CAIA Association is a global network of forward-thinking investment professionals, redefining the future of capital allocation in a world where traditional and alternative investments are converging at an unprecedented pace. United by a commitment to improving investment outcomes, we lead with authority, educate to inspire, and connect people who turn insight into action. CAIA Association creates dynamic and captivating learning experiences designed to engage investment professionals at every level. Its programs – the CAIA Charter and the CAIA.nxt™ platform – offer critical levels of access to a comprehensive curriculum that equips the investment community with the skills and knowledge needed to build modern portfolios. CAIA Association is a global member-driven community of more than 14,000 professionals, united by a shared commitment to improving investment outcomes and building a more aligned, principled capital market system.
Senior Managing Director, GP Strategic Capital Platform, Blue Owl
Sean Ward is a senior managing director of Blue Owl Capital Inc., a member of the firm’s Executive Committee and a member of the firm’s board of directors. Ward also serves as a member of the GP Strategic Capital Investment Team. Prior to joining Dyal Capital, the predecessor firm to Blue Owl’s GP Strategic Capital platform, Ward was a vice president at Lehman Brothers and held several roles at Neuberger Berman after it became an independent firm, including senior counsel for Neuberger’s alternatives business. Prior to joining Lehman Brothers, he was an associate at Covington & Burling LLP, where his practice focused on mergers and acquisitions, public and private securities offerings, and credit transactions. Prior to Covington & Burling LLP, Ward worked at Davis Polk & Wardwell LLP in New York and London.
Executive Director and Head of Alts, USAA
Shawn Ury is Executive Director and Head of Alternatives at USAA, a financial services company providing insurance and banking products to members of the military, veterans, and their families. Shawn’s team oversees 13 different asset portfolios and two charitable foundations. Shawn served as a medic in the Army and later as the Police Captain of San Antonio.
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